Dormant accounts: preparation and submission

From 2014, companies and individual entrepreneurs under the general taxation regime may file VAT returns in electronic format only, and only through telecommunications channels. Failing that, submission is not acknowledged and the taxpayer is subject to fines or account freezes.

However, in the absence of current account activity, a single (simplified) tax return can be submitted in paper form (not to be confused with the tax return under the simplified USN system). The single declaration replaces the corporate income tax and VAT returns. Only inactive companies, i.e. with dormant accounts, can file simplified declarations.

Important! You can only file a single (simplified) tax return on paper if you are a 100% certain there were no cash flows on the current account. If, for instance, the bank has charged commission, you must definitely file an electronic VAT return.

Once the inspectors get the paper declaration, they send an information request to the bank. If there have, in fact, been movements on the account, a fine is imposed and the account may be frozen. Therefore, if you are subject to the general taxation regime, it is safer to submit electronic reports to the Federal Tax Service Inspectorate straight away.

Often, a current account is already open and the bank charges commission. Consequently, the company is no longer dormant, and you must choose one of the following solutions, i.e. either

to expense bank charges: In this case, the company is no longer considered inactive despite the absence of quarterly income. Your tax declaration and financial accounts show a loss.

not to expense bank charges: You have the right not to include bank charges in your accounts.

In that case, you can submit dormant accounts and need not explain your losses to the taxman. In addition, filing dormant accounts through us is cheaper.

For the tax inspectorate, it is more important that the tax returns were filed in full. Whether the company is dormant or not does not matter.

If the company is registered and does not file any accounts, this may result in:

• current account freezes;
• the managing director being summoned to the tax inspectorate;
• fines imposed on the company and the managing director personally.

You can choose from the following two options.

By mail, with a list of enclosures. We put together all the declarations for you. All you need to do is print them, sign them and send them off by mail from the nearest Russian post office.

We send you the list of enclosures by e-mail together with the declarations themselves. It includes a complete list of declarations and also the address where your dormant accounts must be sent to.

Please note! The postal workers must stamp the enclosure list as shown. The stamp includes information on the dispatch date. This is considered the date of submission. You must retain the enclosure list together with your duplicates for at least 5 years.

This method has one disadvantage. The post office might not deliver the documents on time. However, the enclosure list and postal mark prove that any allegations of late submission are unfounded.

Another suggestion: other than the enclosure list you can send off the accounts with a delivery confirmation. You can get the form in a post office as shown.

The delivery confirmation means that your letter is personally handed to the recipient (employees at the relevant government bodies) and signed for. This signed confirmation is then returned to you: indisputable proof that the officials have received your set of dormant accounts.

Hand it to the tax inspector personally. If you choose this method, you or a representative must go to the tax inspectorate to submit the dormant company accounts.

If you submit the accounts for a legal entity, anyone can be its representative. A simple power of attorney from the managing director is enough. However, representatives of individual entrepreneurs require a notarised power of attorney.

The advantage of this approach is that you can be sure the dormant accounts have been accepted. Your copy will be stamped in confirmation.

The disadvantage, on the other hand, is that you need to spend a lot of time travelling to the tax office and queuing there.

If you prefer not to go anywhere or send anything off, choose the “Comfort” package, where we submit your dormant accounts ourselves.

These days, it is difficult to suggest any particular bank. Many choose a bank because relatives, friends, acquaintances, etc. work there: due to personal connections. However, in our view, it is important to pay attention to the following aspects:

• if you are happy with the bank charges;
• if the bank offers online banking and if you are happy with its price;
• how close the bank branch is to your office. Is it convenient to go there to sign documents, drop off payment instructions or pick up the statements of account in the original?
• is the bank reliable (based on external sources)?

On the www.banki.ru website, you can find the bank’s rating.

All government bodies send their postal correspondence to the legal address indicated in the registration documents.

If your company is located elsewhere, letters to that address arrive late or not at all. In such cases, the managing director may only find out about looming problems when it is too late.

Sometimes letters are simply returned to sender. This might make the authorities block your current account until the managing director visits them and explains them why it was impossible to contact him at that address. Next, the tax office demands a change of legal address.

We would like to warn you: all purchased legal addresses are “mass registration” addresses. You need to pay stamp duty again, buy a new address and register it in turn.

When incorporating the company, you can indicate the managing director’s address of permanent registration. It is now easy to use such addresses.

Generally speaking, we can answer this question as follows: those who work with corporate customers are better off using the general taxation system. This is required so that you can issue VAT invoices to your clients. In this case, buyers can deduct VAT.

The simplified taxation system is attractive to those companies which work directly with consumers or other counterparties subject to special taxation regimes (simplified, single tax on imputed income, patent taxation system).

Of course, the choice of taxation regime is not that simple. Much depends on the specific profile of your business.

The choice, within the simplified tax system, between a 6% tax rate on revenue or 15% on profit also depends on many factors.

You can discuss the choice of taxation system with our tax consultants. They will help you choose the taxation system that is ideal for you.

Yes, you can and should spend the paid-in capital. This sum is needed to pay the company’s expenses in developing the business before it generates any revenue.

Important! Do not forget to pay in the capital within four months of the incorporation date, or the tax service might liquidate the company.